Taxes are there to provide a base demand for the currency. Imagine the money supply as a bathtub. Government spending is a tap and taxes are a drain. You want t

Taxes are there to provide a base demand for the currency. Imagine the money supply as a bathtub. Government spending is a tap and taxes are a drain. You want the water line to be just right for a given economic growth. The government doesn't need to tax to spend, but why would you accept it's currency as payment for goods the government demands? Because you owe the government a tax in that currency! This system was figured out thousands of years ago. Turns out banks also create money, not just government. 97% of money in circulation is actually bank credit. (banks have a special legal right here) In other words, when you take out a loan, you increase thr money supply! But anyway, without taxes (the threat of physical hardship) you don't have the base demand for a currency. Governments hold the monopoly on money because they also hold the guns. I can't create my own money because that would be illegal (because for my money to gain traction I would need to tax too, just like the government) Cheers.